Walgreens To Expand Use Of Prescription-Filling Robots, Cites $500 Million In Savings As Motive

Walgreens has plans to expand its use of robot-powered micro-fulfillment centers
The centers currently serve 4,800 stores, and fill more than 16 million prescriptions each month
The push for automation comes as Walgreens prepares to go private in a deal with Sycamore Partners

Walgreens will be expanding its use of prescription-filling robots, CNBC reports.

The pharmacy chain began using micro-fulfillment centers in 2021 before pausing the program in 2023 to focus on feedback and improvement. Now, it’s working to add more in order to free up time for pharmacy staff, reduce time spent on routine tasks, and eliminate inventory waste.

The robot-powered centers fill thousands of prescriptions for patients who use medication to manage conditions like diabetes and high blood pressure. With those tasks automated, Walgreens told CNBC its pharmacy staff will have more time to interact directly with patients and perform clinical services like vaccinations and testing.

Don't Miss:

Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.30/share!
Hasbro, MGM, and Skechers trust this AI marketing firm — Invest before it's too late.

The company told CNBC it hopes to have 11 micro-fulfillment centers serving 5,000 locations by the end of the year. In February, there were 4,800 stores that utilized the micro-fulfillment centers. On average, these centers handled 40% of the prescription volume at the individual locations, Walgreens says, which translates to about 16 million prescriptions filled each month across all serviced stores.

Kayla Heffington, Walgreens' pharmacy operating model vice president, told CNBC that the company's investment in automation is already paying off. The micro-fulfillment centers have generated $500 million in savings through their increased efficiency and reduction of excess inventory. Stores that use the centers are also administering 40% more vaccines than those that aren't, increasing profits.

Today's Best Finance Deals

"Right now, [the micro-fulfillment centers] are the backbone to really help us offset some of the workload in our stores, to obviously allow more time for our pharmacists and technicians to spend time with patients," Rick Gates, Walgreens' chief pharmacy officer, told CNBC. "It gives us a lot more flexibility to bring down costs, to increase the care and increase speed to therapy – all those things."

Trending: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — this is your last chance to become an investor for $0.80 per share.

Gates added that he sees the micro-fulfillment centers as a competitive advantage for Walgreens, because many independent pharmacies and larger rivals don't have the centralized support. However, many of Walgreens' major competitors, like Walmart WMT, Kroger KR, and Albertsons ACI, already have, or are testing, their own versions of the micro-fulfilment facilities.

There are, of course, risks that come with using these micro-fulfillment centers, like a reliance on sophisticated robotics that can cause major disruptions if errors occur. But for Walgreens, the rewards heavily outweigh the risks.

Heffington told CNBC that the automated locations have helped reduce prescription fulfillment costs by nearly 13% year over year, and have increased prescription volume by 126%. The centers also allow the company to have real-time data on all prescription fulfillments, enabling its employees to provide better customer service.

The renewed push for automation comes as Walgreens prepares to go private in a $10 billion deal with Sycamore Partners. The buyout is expected to be complete by the end of the year.

Read Next: